One customer found a way to settle through a Federal Trade Commission act

When you terminate a car lease early, your contract will often require you to pay the remaining lease amount, an early termination fee, any remaining depreciating costs and more penalties, according to dmv.org. These costs can vary from dealer to dealer, and the DMV encourages lessees to carefully read lease contracts to be sure there are no surprises if they must terminate the lease early.

The same goes for solar leases—but the stakes (and costs) are even higher. Though the contracts can be many pages long, the pain of scouring through them will be far less than that of surprise cancellation horrors. After residential installer Sungevity went bankrupt and distributed its assets to multiple companies, those who had leases through the company flocked to solarpowerworldonline.com to figure out what to do next.

On Solar Power World’s news stories about Sungevity’s bankruptcy and subsequent merger, commenters questioned what to do next about their leases. A commenter named Amber Brown asked, “The real question—do we have to pay the lease still??” Another commenter going by “Veronica in New York” said, “I am worried I purchased a 20 year lease with Sungevity in June 2016 and now they filed for bankruptcy in March 2017. My inverter went down 2 months ago and I can’t get a repair team to come out to get me back on line.”

One unhappy customer contacted us directly to tell us she was in a particularly confusing situation. Jean Kleber’s husband works for the government. While they expected to stay in New Jersey for the life of their 15-year Sungevity lease, he ended up being relocated six years after they signed.

Kleber was aware that government jobs can always come with a hint of uncertainty, so she did her due diligence up front to ask Sungevity what would happen if they did have to move before the lease was up. She said the solar company assured them many times that even if they had to move and sell the home before the lease ended, they’d have no trouble.

“There were plenty of assurances this is not going to be a problem. ‘Worst case-scenario, you can terminate it, no big deal,'” Kleber said.

When they found out her husband was being relocated to Florida for work near the end of 2017, Kleber went through weeks of stress trying to figure out the best way to proceed—whether it be purchasing the panels, trying to get the next buyer to assume the lease or terminating it outright. After being given the run-around by the companies that took over Sungevity’s assets, namely Omnidian, she finally decided to file for arbitration on the basis of violation of the Consumer Leasing Act. She and the leasing services company that took over Sungevity’s assets settled at Kleber paying an undisclosed amount to terminate the lease and for the company to leave the panels on the home. She said the company plans to get the next homeowner to pay it for monitoring.

“I’m very familiar with Jean Kleber’s case, and those of many other consumers left holding the bag after Sungevity’s bankruptcy,” said Omnidian CEO Mark Liffmann via email. “Having personally spoken with Mrs. Kleber, I understand her frustrations. Many partners have been pulled in to help Sungevity customers, including our firm. Our role is system monitoring and maintenance. We guarantee that systems perform as expected and we continue to serve thousands of Sungevity lease holders. But Omnidian does not own these assets. We don’t have the authority to change or terminate a Sungevity lease because we don’t own the lease.”

Kleber’s situation was made more complicated by a bankruptcy, but other solar lessees could have similar issues.

While vehicle leases are usually five-year contracts, solar leases are often for longer than 15 years. Consumers must be sure they’re staying put for a long time before they put pen to paper.

“As a consumer, 20 years feels a little too long to me. There are not that many things in life that you sign for that long,” said Vikram Aggarwal, CEO of consumer-facing solar quote comparison company EnergySage.

People can be attracted to the solar leasing option for a number of reasons. For one, it’s a simple way to save money on electric bills and lower a home’s carbon footprint. Also, the solar company providing the lease will typically handle maintenance, so it’s hassle-free. And consumers don’t have to take out a loan like they would to buy a solar system.

For retirees with no taxable income who can’t benefit from the ITC or other tax incentives, leases may be the only way they can go solar.

“It’s an extremely simple process and it gets them a small savings,” Aggarwal said.

But the downsides shouldn’t be overlooked. Lessees can’t take advantage of the ITC and state-specific solar rebates and incentives because they don’t own the system. And a lot of the money a consumer saves on energy bills will go toward paying the leasing company.

The value of the system seems to be an afterthought in a solar lease, much different from when a consumer is looking to purchase solar. Kleber said she had no idea what the panels on her roof were worth when she started looking more closely at her lease.

“What we see is when consumers are looking at owning the system, they’re very focused on the quality of the equipment that is being installed,” Aggarwal said. “Whereas the leasing company basically downplays the value of the equipment. ”

Kleber ran into this problem when she considered selling the panels with the home, but the appraiser told them the panels only added $1,000 in value to the home. Meanwhile, the solar company told her the array was worth $21,000.

“We didn’t even know the value of them when they put them on our house,” Kleber said. She couldn’t find the value written anywhere in her lease either.

If a lessee does have to move before the lease is over, the options can include buying the system outright, trying to get the new homebuyer to assume the lease, or paying to terminate it and have the panels taken off the roof.

Because equipment value is often not at the forefront in leases, homeowners who buy the panels and own the equipment may find the equipment is not the right quality for their needs.

Unhappy customers like Kleber are bad for the industry. She said she will never consider solar again because of this experience, and discourages friends from trying it too. Solar installers and leasing companies can avoid disgruntled customers by being much more transparent up front. Aggarwal said one solution could be to offer shorter lease options, similar to the structure of solar loans. Another is for solar companies to be conservative in their calculations of how much money the solar lease will actually save the customer based on realistic utility energy inflation rates.

An industry-wide standardized leasing contract could also help clear up the murkiness of solar leases. SEIA released a template that would do just that, if many companies chose to adopt it.

Despite the murky areas in solar leasing, Aggarwal said leases do have an important role to play in the industry.

“We are hoping that there is some more innovation in this space where leases are made more flexible, have different terms, different options for the customer, let the customer select their equipment, really help them make the right decision,” Aggarwal said.

Those who are struggling with Sungevity leases are encouraged to look into the Consumer Leasing Act, a ruling by the Federal Trade Commission. If you’re a homeowner considering solar, you can visit solarunitedneighbors.org for assistance. The nonprofit calls itself “the only organization in the country dedicated to representing the needs and interests of solar owners and supporters.”

Updated with Omnidian’s comments on Jan. 5, 2018

About The Author

Kelsey Misbrener

Kelsey is senior editor of Solar Power World.

Comments

I wish before taking over, they should rewrite the contract or giving new options during the transition. I’ve called the customer service on my current bill to inquire relocate the unit to the new area due to remodeling of the house. It seems impossible to be simple: 1st have to deal with 3rd party, 2nd City permit, 3rd expecting highly expense, and 4th may take 2-3 months. If someone have this kind of experience please let me know.

I bought 32 panels for $30,000 from Sungevity, I called Sungevity for service and monitoring of my panels and their phone number has been disconnected and they filed for bankruptcy. My question is am I obligated to pay the remaining balance on my solar loan when the company Sungevity broke the contract by not honoring monitoring and servicing for my solar panels for 20 years?

I just need help. Local company that services quit returning my calls. Ever since we had issues with storms and one panel broke, my house trips the breakers on our panel. I am afraid it is the PV system causing the panel to overheat?…..Worried that I cannot get help and I will be charged out of pocket for work that I need done because I am tired of tripping my breaker.

Sungevity put a 3.9 kW array on my roof in 2011 and i have been ecstatic ever since. The lease fit our needs perfectly as we did not want to buy the hardware and software but just the e- they produced. Without the upfront cash, the lease was a perfect option for us.

The entire process start to finish was seamless and exactly as advertised. the array continues to produce a good clip and my only regret is having sized our system just as we moved in to our home and before we made it run more lean and, thus, we are about 25% oversized. But, we sell that e- back to the utility for a modest fee at the end of every year. Long story short, i am empathetic with those who have had less good luck than we have had but the experience for us has been stellar (so to speak). And we continue to pay our lease amount to the new recipient in a transition that was also seamless. however, should our inverter blow, i might sing another tune.

Well, PMS, I leased a solar array through Sungevity in 2012 and for years my experience was similar to yours. The installation went smoothly, the system worked fine, we saved lots of money and so on. Sungevity even sent me an iPad to use as a recruiting tool. Happily, I never referred a customer who signed a contract with Sungevity. Had I succeeded in doing so, I’d feel terrible today were my referrals facing the headaches many Sungevity customers are dealing with today

About a year ago I began to notice that the system was not performing as well as it had. I was still saving money but not as much as the “limited liability warranty” promised. The monthly lease charges continued to be deducted from my account, but I was unable to reach anyone to look into the problem. A few months ago I received a call from a company I’d never heard of saying they were now monitoring my system and had noticed the performance degradation. They suspected shade trees were the problem. I assured them that was impossible.

Weeks later a technician showed up and found that almost half of the Hyundai panels had failed. He told me that even Arizona’s largest utility got burned with these panels and had to replace hundreds of them at one of their huge desert solar stations. He said he would submit his report to his boss who would pass it along to whomever Sungevity assigned my lease. My account says the lease payment go to Robosolar, but the phone number on the account statement is no good. The email initiating the inspection came from Solar tech Services in Torrance, CA and indicated that Omnidian has enlisted them as the service provider for my area.

So you can sing your happy tune about Sungevity until there’s a problem. I sincerely hope you’re spared. I’m an environmental activist and was eager to go solar. This much is clear: As long as Trump is in office and Republicans hostile to the solar industry control Congress, there’s real risk in going solar. The big power companies still hold sway in many states such as mine, and want any benefits from renewable energy to flow their way, not to consumers. The solar power industry is young, vital and growing fast, but it’s still a small fish in a sea full of large predatory sharks. Without the support and protection of strong federal regulations and subsidies, there will be real risks for consumers. Get out and vote at every election, take back the government and ensure the future of clean energy and a strong EPA. Peace.

I have had a problem from day 1 they sent out 6 different so called technicians. Finally after 3 years after me telling them the inverter and arrays were fine. I am an electrical engineer who used to work on real 400 HZ inverters for the military. These green technicians would not listen. Finally they sent someone that listened. 10 min later the real problem found.sungevity missed small shading trees. They spent 3 years all the money for no fix and now that they know how to fix refuse to cut down the small finger pine trees that would cost less than 700.00 dollars. How much and how hard did they try to correct the problem to now say sorry fix it yourself. So I say no payment till you at least return my call to work this out along with no monitoring!!!!!!!

Hello everyone,
My company, Beacon Solar, installed several hundred systems for Sungevity in Massachusetts. We offer ongoing maintenance and warranty work. Please us a call if you are in need of assistance at 508-738-8112 or email at info@beaconsolarma.com.
Thanks

I’m a former employee of Sungevity now with a new, smaller solar company. I’m trying to help a client who actually PURCHASED a system from Sungevity. Her Sunny Boy inverter has failed and now she’s getting no production. She’s getting no information or cooperation from anyone. Is anyone servicing Sungevity’s customers who purchased their systems?

Why lease when you can buy? The price of solar hardware is so cheap now, I can design and build a solar system at $2/Watt. The “long tail” installers have the big nationals over a barrel — bye, bye! A real problem is that there are contractors out there still giving outrageous quotes. I’ve seen times where I’ve quoted a system at $20K, and the competitor had given a quote of $50K, so that’s not really competitive; it’s downright extortion. Online quote generators which level the playing field are the customers’ best friend, and they are making their way into the main stream; they give the customer a baseline quote on hardware, so it makes for an informed consumer, and not one that has to “trust” the carpetbagger. When the ITC finally goes away, then quotes will get more in line with reality; some contractors look to steal that 30% credit from the customer. What’s the old saying though — caveat emptor or buyer beware!

Hello all posting,
I’m starting a Facebook group to bring all our experiences together. This site is an industry magazine, so they really cannot give us the in- depth investigating we need. SEARCH for Facebook group “Sungevity Bankruptcy Homeowner’s Group”
Me. Misbrener, it would be greatly appreciated if you can forward this info to any posters. Thank you.

I guess it’s easy for folks NOT being scammed by the Sungevity fiasco to preach about due diligence, etc. But guess what? Not everyone wants to buy upfront and be accountable for maintenance on a system. When we signed 7 years ago, Sungevity was highly rated, provided excellent service, and was an affordable option that fit our needs perfectly. Like other customers, we were assured that transfer of the system would be simple, and our home value would be enhanced by the addition of solar. Additionally, we just liked the idea of using solar and producing energy! I’ve read my contract dozens of times, and it really does NOT indicate what happens if Sungevity backs out thru bankruptcy. Meanwhile, a LOT of people are sending money into some electronic black hole, we have no way of monitoring our systems, and suddenly the utility company is charging us massive end of year “true-up” charges because apparently we are no longer being credited for power we generate into the grid!
I’d think you might be a little more empathetic since this type of atrocious management is going to smear the entire industry and sour a lot of customers who could have been positive ambassadors for solar power.

I have to comment on this because of the inconsistency with the article’s title leading to an overall discussion of solar leasing. First of all, a customer who chooses to opt out of a lease due to a move would simply be able to transfer the lease agreement over to a new homeowner. Most solar companies have this standard option. The case of Sungevity and other bankrupted companies like it does not compare to transferring a solar lease with a viable and active company still in business. I don’t understand how a discussion about Sungevity’s bankruptcy causing problems for lease customers can apply to leasing in general. They are really two different beasts. Second, if you’re going to headline your article with a mention of Sungevity leases, I want to hear about how customers are dealing with the fallout from their bankruptcy, who’s taking over the leases, why companies like Omnidian are making it difficult, and HOW other customers have opted out of leases. Not two paragraphs about Sungevity and then the rest about leasing in general. It’s pretty common knowledge these days that leasing is not as beneficial for the customer as a purchase or a ppa, although it can be good for some people. Now, for the title issue: It sounds like Kleber should have done a LOT more research and gotten some serious answers before signing her lease, as she found a lot of surprises, that shouldn’t have been surprises. Also, she needs to get a second opinion on that appraisal. On average, solar panels should add about $15,000 to the value of a home, according to a recent New York Times article on the subject. As far as dealing with a lease agreement after a bankruptcy, of course it’s going to be a significant challenge because assets are being sold off to different companies, and yes, Sungevity should have handled this much better and prepared for their customers to be well taken care of after the lease contract was transferred. However, usually the terminology of the contract does stipulate what would happen in the case of bankruptcy or transfer to another lease owner, so, really, lease customers shouldn’t be that surprised if they’d read the fine print in the first place. I hate to put the onus on the customer, as Sungevity really didn’t handle things well in the end, but there is some mutual responsibility here, as far as knowing what you’ve signed.

You make some valid points but, I feel your missing some of the major issues that are not addressed. 1. When an issue (power problem, inverter problem, panel problem, etc.) takes place, customers have no where to turn to have them addressed. 2. I’ve seen a few different car leases that tell nothing of bankruptcy, and as you’ve said before; a different beast all together. 3. People are on this forum to find out what to do next, whatever did or did not take place at the time of the lease is irrelevant now.

I bought mine up front in 2001. No incentives or leases even existed but it was the right thing to do. It has paid off and more. The panels should last 50 years. I don’t need or,want new ones mine make more that I use.

“Unhappy customers like Kleber are bad for the industry. She said she will never consider solar again because of this experience, and discourages friends from trying it too.”

Pretty extreme to NOT try going solar again… Better to buy a proper outfit up front and NOT lease again. Regardless of the size of company, long term leasing is not a very smart / cost-effective thing to do as you wind up paying 3-4 times the actual real cost. The worst part is your locked into whatever hardware is up at the time, from panels to inverters and the tech is changing much too fast for that. Consider what a 350w panel costs today compared to that 250w panel 4 years ago and now 450w panels are breaking into market. Then there is the whole Battery Bank question which is also a moving target not only as a product line but the costing which is moving faster than a racing turtle with a jet booster.